Background

Pfizer parties (collectively, Pfizer) were concerned that Samsung Bioepis Co Ltd Korea (SBK) and Samsung Bioepis AU Pty Ltd (SBA) were infringing one or more of their registered patents claiming a process for making a biological medicine, etanercept. Pfizer therefore sought orders pursuant to r 7.23 of the Federal Court Rules 2011 (Cth) for preliminary discovery of confidential documents lodged with the Therapeutic Goods Administration (TGA) in order to determine whether to commence proceedings against SBK and SBA for patent infringement.

Etanercept is the active ingredient in ENBREL, a biological medicine used in the treatment of autoimmune diseases sponsored in Australia by Pfizer Australia Pty Ltd. Until recently, it has been the only product containing etanercept registered on the Australian Register of Therapeutic Goods. In 2016, SBA sponsored the registration of two pharmaceutical products containing etanercept as their active ingredient and both have been registered on the ARTG under the name of BRENZYS. The parties agreed that BRENZYS were developed as a biosimilar to ENBREL, meaning that it is almost an identical copy of an original product that is manufactured by a different company. The TGA guidelines require that biosimilars must satisfy an extensive comparability exercise with the chosen reference medicinal product to ensure similar quality, safety and efficacy. However, Burley J noted that simply because BRENZYS and ENBREL were biosimilars does not conclusively determine that the process used to manufacture the products is the same.

Decision

Burley J accepted that through a chain of correspondence with the respondents, Pfizer had made reasonable inquiries and did not have sufficient information to decide whether to commence proceedings, as required by FCR 7.23(1)(b). On this note Burley J confirmed that it is sufficient for a prospective applicant to broadly provide the basis on which it forms the views that it holds and makes inquiries of parties from whom it might reasonably be expected that relevant information may be obtained. Burley J specifically observed that Pfizer’s offer of a confidentiality regime confining access to the requested documents assisted it in establishing the reasonableness of its inquiries.

The main issue for determination was whether Pfizer had the requisite subjective and objective reasonable belief that it had the right to obtain relief for patent infringement from SBA in accordance with FCR 7.23(1)(a). There was no dispute that Pfizer had demonstrated the requisite subjective belief. However, the substantive debate was whether there was an objective basis. Pfizer reasoned that BRENZYS had a peculiar level of similarity to ENBREL and that because of the complexity of the products the similarity inferred that the process to make each product must be similar. Further, because Pfizer contended (without adducing direct evidence) that the process by which it manufactures ENBREL falls within the scope of the claims in question, the process by which SBK manufactures BRENZYS must therefore also fall within the scope of the claims. Nonetheless, Burley J held that this chain of reasoning did not rise above speculation. Accordingly, Pfizer failed to demonstrate a reasonable objective belief that they have the right to obtain relief for patent infringement from SBA in accordance with FCR 7.23(1)(a).

Further, Burley J found that even if Pfizer had established the requisite reasonable belief, he would have exercised the judicial discretion conferred by FCR 7.32(2) against granting the preliminary discovery order sought. Burley J noted in particular the scope of the documents sought and the fact that Pfizer did not adduce evidence of its own manufacturing process for ENBREL.

Implications

This decision of Burley J to dismiss Pfizer’s application for preliminary discovery begs the question of how the patentee of a patent claiming a process or method of producing a product, rather than the product itself or a method of using it after it has been made and entered the market (eg, in a method of treatment), can obtain the information necessary to elevate suspicions of infringement to the requisite level of belief to commence court proceedings.

The issue is particularly stark in the context of biosimilars and generic pharmaceuticals, where associated regulatory requirements mean the allegedly infringing products are relevantly equivalent (and possibly identical) to at least the patentee’s own approved products (which patentees will contend embody the inventions of one or more of their patents). The confidential nature of regulatory applications such as those made to the TGA mean the only parties with access to documents which set out the manufacturing processes for the subject products are the product sponsor and the TGA itself. The likely futility of seeking the information or documents from the TGA under the Freedom of Information Act 1982 (Cth) (see: Secretary Department of Health and Ageing v iNova Pharmaceuticals (Australia) Pty Limited [2010] FCA 1442 (21 December 2010)) means that a patentee’s only practical option is to seek the information required to form a view on infringement of its patents from the alleged infringer itself – either voluntarily through correspondence, or under the compulsion of a court order for preliminary discovery.

From this perspective, Burley J’s decision that Pfizer had not satisfied the requirements for a preliminary discovery order appears harsh – particularly where it was clear the sought information and documents existed and access could have been confined to Pfizer’s external solicitors subject to a strict confidentiality regime. However, the critical aspect underpinning Burley J’s decision appears to have been that Pfizer needed to, but did not, adduce evidence regarding the processes by which its own products were produced, which would have established whether or not those processes embodied the inventions of one or more of its three patents. That is, Pfizer effectively needed to provide quid pro quo by giving the Court and SBA’s external lawyers confidential access to details of its own production processes, as this could have resolved many of the uncertainties and assumptions underpinning its objective reason to believe. Although such an approach by Pfizer may not have led to a different outcome on its preliminary discovery application, it does appear that any patentee seeking such an order to establish infringement of patents claiming production processes should be prepared to adduce evidence of its own production processes, at least to the Court and the other party’s external solicitors.

Pfizer has until mid-April 2017 to lodge any appeal from Burley J’s decision. However, BRENZYS (to be marketed and distributed by Merck Sharp & Dohme) will be listed on the PBS, triggering price drop implications (initially 16%) for ENBREL, from 1 April 2017. Therefore, even it does successfully appeal this decision and ultimately obtain preliminary discovery of documents which provide sufficient information to sue SBK and SBA for patent infringement, Pfizer’s opportunity to obtain an effective interlocutory injunction restraining BRENZYS and protecting the PBS price of ENBREL appears to have passed.

Industries

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